U.S. faces retaliation for latest tariff measures

WASHINGTON — President Donald Trump's decision to levy tariffs against steel and aluminum imported from Canada, Mexico and the European Union was met with dismay from nearly every industry sector and promises of retaliation from the affected countries.

Representatives of the tire and auto parts industries expressed grave concerns about the president's actions, and even the United Steelworkers union, which generally supports all measures to protect American workers, said steel and aluminum tariffs against Canada were "unacceptable."

Mr. Trump issued two proclamations May 31, going into effect the next day, ending the suspension of 25-percent tariffs on steel and 10-percent tariffs on aluminum imported from Canada, Mexico and Europe.

The administration originally issued the tariffs March 8 under Section 232 of the Trade Expansion Act, which allows remedial action against imports deemed to present a national security threat.

"Measures are in place to address the impairment to the national security threatened by imports of steel and aluminum from Argentina, Brazil and Australia," a May 31 White House statement said. "At this time, similar measures are not in place with respect to steel or aluminum imports from Mexico, Canada or the European Union."

The statement said the Trump administration will continue discussions on trade with Canada, Mexico and Europe, but left no doubt the administration considers the tariffs necessary.

"The Section 232 steel and aluminum tariffs have already had major, positive effects on steel and aluminum workers and jobs, and will continue to do so long into the future," the White House statement said.

In an accompanying document, the White House said the president welcomed discussions with any country about alternative means of addressing the national security concerns surrounding steel and aluminum imports.

The administration reached satisfactory agreements with South Korea as well as Australia, Argentina and Brazil, but not with Canada, Mexico or Europe, the document said.

"Current quantities and circumstances of steel and aluminum imports into the U.S. threaten to impair national security," it said. "These excessive imports are driven in large part by the worldwide glut from overproduction by other countries."

The affected nations were quick to institute retaliatory measures against the U.S. On June 5, Mexico slapped 25-percent tariffs on U.S. steel products, as well as similarly high tariffs on U.S. agricultural and alcohol products, including pork, apples, potatoes and bourbon.

Meanwhile, the EU has filed a case against the U.S. before the World Trade Organization. It has not finalized a list of U.S. goods it has targeted for tariffs, but the tentative list include Levis jeans, cranberries, bourbon and peanut butter.

"Today is a bad day for world trade," Cecilia Malmström, EU commissioner for trade, said May 31.

Ms. Malmström said she had spoken frequently with U.S. Commerce Secretary Wilbur Ross to achieve a permanent tariff exemption for the EU.

"Throughout these talks, the U.S. has sought to use the threat of trade restrictions as leverage to obtain concessions from the EU," she said. "This is not the way we do business, and certainly not between longstanding partners, friends and allies."

The fastest and most vigorous response came from Canada. On June 1, the Department of Finance Canada issued a list of nearly 150 goods imported from the U.S. that will face tariffs of 10 or 25 percent beginning July 1.

The list included many steel and aluminum goods, as well as rubber and plastic mattresses, glues and adhesives, agricultural and food products, and other products ranging from motorboats to ball-point pens.

"The Government of Canada is confident that shared values, geography and common interests will ultimately overcome protectionism," Canadian Prime Minister Justin Trudeau said in a June 1 statement. "(But) as we have consistently said, we will always protect Canadian workers and Canadian interests.

"Americans remain our partners, friends and allies," Mr. Trudeau said. "This is not about the American people. We have to believe that at some point their common sense will prevail. But we see no sign of that in this action today by the U.S. administration."

Anne Forristall Luke, president and CEO of the U.S. Tire Manufacturers Association, and Ann Wilson, senior vice president of government affairs for the Motor & Equipment Manufacturers Association, both said the U.S. tariffs would harm their members.

"Already we are seeing swift retaliation and proposed countermeasures from our closest trading partners, which is harmful to America's manufacturers, the U.S. economy and our global relationships," Ms. Luke said.

"In addition, our members have been clear about the impact of such tariffs on the growing U.S. tire manufacturing industry," she said. "These tariffs could undercut future domestic growth, limit the availability of high-quality steel and impact American tire manufacturing jobs."

Ms. Wilson said the tariffs disrupt the international supply chain for U.S. auto parts makers and other industries.

"Many specialty steel and aluminum materials imported by motor vehicle suppliers are used by hundreds of vehicle parts manufacturers operating in an integrated, complex global supply chain," Ms. Wilson said.

"Suppliers' access to these specialized products — which are often only available from one or two sources in the world — is critical to the industry and our national economy," she said.

The United Steelworkers union said it was "profoundly disappointed" by the tariffs against Canada.

"This decision is unacceptable and calls into serious question the design and direction of the administration's trade policy," the USW said.

"The decision not to exempt Canada ignores the fact that Canada's steel and aluminum exports to the U.S. are fairly traded and that Canada has shown its willingness to strengthen its laws as well as its cooperation with the United States to fight unfair trade," said the union, which has a substantial membership base in Canada. "Today's decision is wrongheaded and erodes the certainty companies need to conduct operations and invest in the future."

Another supporter of tariffs, the Alliance for American Manufacturing, had muted praise for the president's actions.

"There is evidence the Section 232 strategy is working as the Trump administration moves ahead with its steel and aluminum trade actions," AAM President Scott Paul said in a statement. "American smelters and steel mills are reopening, which means more jobs and added capacity. Looking ahead, the product exclusion process must be reasonable, and narrow enough so that it does not undermine the intent of the relief. The goals of restoring American industries to a sustainable operating capacity and protecting national security must remain paramount."